Sometimes moving an entire organization pales in comparison to adjusting the mindset of one manager.

In 2008, I was in an engineering support role and wanted to implement a process reliability approach developed by H. Paul Barringer in the mid-90s (a mentor of mine at the time) to quantify the hidden-opportunity to improve overall reliability, not just equipment reliability in the Oil & Gas Industry. As part of the Six Sigma Greenbelt Project that I used to implement this approach, I was able to quantify 30% of hidden capacity in the company assets while in a sold-out market. The company was considering a $500 million capital project to address this shortfall.

A senior and influential business manager reviewed the results of this project and concluded the results were flawed. He stated that because the business was making a lot of money, he didn’t even believe that the plants were performing this poorly. He further voiced that even if portions of the analysis were correct, the report did not tell them what to work on to extract more capability, and therefore was of no value to the company. Of course, the resistance of this manager made me wonder if the hill was even worth the climb to continuing pursuing the Barringer approach within this company. I started thinking that perhaps he had a problem with the fact that the analysis pointed out certain management issues as contributing factors to hiding this capacity in the first place and therefore he rejected the approach itself.

A few other managers were intrigued with the results and would offer their support if I could also use the approach to define specific improvement projects to release the hidden capacity identified. I contemplated that an integration of simple Monte Carlo analysis combined with Barringer Process Reliability could meet this challenge.

I knew that it was unconventional to use a single Monte Carlo simulation to combine the output from multiple production lines. Everyone told me it wouldn’t work, but I just knew it would if it was given a chance. At the same time, I was apprehensive to blaze a new frontier for fear of overpromising and under delivering that is typical of many production operations with reliability issues. In the end, I met the challenge through a focused execution of Lean, Reliability and Six Sigma tools that delivered a sustainable improvement that yielded a 15% capacity increase, $44 million increase in product sales and allowed a deferral of the $500 million capital project to meet the projected business demand shortfall. I now refer to this problem-solving approach as the “Dollarized Pareto Plan”. As I worked to develop this approach, it became crystal clear that people commonly talked about lack of execution because of a lack of:

Resources

Focused Value-Add Improvements

Money

Clear Priorities

Meaningful Vision

I saw the global impact this could have and developed a passion to drive this into the very fabric of my business. Process Reliability as developed by the late H. Paul Barringer is all about driving effectiveness in management. Paul has since passed on and handed the baton to me to carry on the education of Process Reliability. I, like Paul, am developing my organization to bring his dream to reality. I have overcome many pitfalls and resistance over the years. I have learned to address the skepticism by customizing this process according to the specific needs of each business. I’ve developed a holistic approach for a business case for leadership development vs. a perceived blame on management. I call this solution “Profit-Driven Process Reliability”.

TO ACHIEVE World Class Excellence (WCE) REQUIRES THAT AN ORGANIZATION ACHIEVE PROFIT-DRIVEN PROCESS RELIABILITY THROUGH CONTINUOUSLY EXECUTING AND IMPROVING IN ALL SYSTEMS. A HOLISTIC APPROACH OR PLAN MUST INCLUDE A FOCUSED BLEND OF PEOPLE, TECHNOLOGY, AND PROCESS IMPROVEMENT INITIATIVES.

Many companies have embarked on an asset management or continuous improvement journey but have fallen short of achieving world class and high cultural performance. They may never realize or sustain the full potential of having this competitive advantage. Historically, 3X the organic revenue growth in future years is generated through strategic execution of innovation for new processes and product programs. An additional benefit is that it also sends positive signals to the marketplace that the company is executing breakthrough operational excellence technologies that will drive sustainable profitability.

In my 35+ years of global consulting experience with Fortune 500 companies, I have observed these organizations commonly thrive on heroic reactive actions to get business, operational failures back on track. They failed to answer, “Could proactive measures have prevented those failures and elevated the business operation to a higher level in the first place?” In many cases, proactive measures would have created a remarkable benefit, but instead, it went unrealized.

Defining Terms

To agree on common terminology we’ll turn to Wikipedia and The Business Dictionary to define several key terms as follows:

is a suite of manufacturing systems designed to execute operations tasks intended to address strategies, such as production, maintenance or inventory tracking. Manufacturing execution systems (MES) are a subset of an operations execution system, as they are typically concerned with executing tasks within just the production line. Other systems which might be included within an OES might include warehouse management system (WMS), supply chain management systems (SCM) or computerized maintenance.

can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competition to achieve its mission. It involves activities such as strategic planning and strategic thinking to achieve business sustainability.

takes the concepts from sustainable management and synthesizes them with the leadership concepts of safety, operations, maintenance, engineering and business management. For example, the practices of a business should be sustainable if they wish to stay in businesses, because if the business is unsustainable, then by the definition of sustainability they will cease to be able to be in competition.

A simpler definition of sustainability is a call to action (CTA), a task in progress or journey. To be realistic and achievable involves a political process; clear definitions and vision must govern the common goals and values that are understood by all to achieve the desired levels of sustained profitability.

Finally, The Business Dictionary defines profitability as the state or condition of yielding profit or gain. It is often measured by price to earnings ratio, and the issue becomes how well it is sustained over longer periods of time.

How Will You Know When You Get There?

So how do you know when you have achieved the desired level of execution excellence? Is it gut-feel-as-you-go? Or, do you have other less subjective and equally effective ways of knowing when you have gotten there? Maybe a better question is, have you ever achieved your desired level of execution excellence? If you answer no, perhaps after reading this article, you will have better insight, and we can work together and connect to help you determine and align and execute your measurable strategy to sustainable profits.

If growth is dependent on strategy execution, how can a business proactively deliver the growth if they are not effectively measuring the organizational excellence in leadership agreement and execution of the strategy?

There is a whole host of sustainability strategies out there for using existing resources optimally the achievement of long-term growth in a responsible and balanced way. Within a business context, economic sustainability involves using the many assets of the company efficiently to allow it to continue functioning profitably over longer periods of time.

You Can’t Know If You Don’t Measure

How can you know any of the above if you are not effectively measuring? Traditional six-sigma efforts use statistical tools (most often the bell-shaped Gaussian distribution) to help find root causes of problems, provide mile-marker metrics. Since most production output data is not bell shaped data, we need a more advanced tool to help define the problem-solving indicators.

Weibull analysis of daily production output (using skewed Weibull distributions) helps quantify problems and offer a system for corrective action:

Quantify and show the business reliability of the production process

Measure the losses due primarily to facility and equipment issues (special cause)

Analyze the size of the hidden operations with suggestions for as corrective action commonly thru a corrective action system, (FRACAS) – Failure Reporting, Analysis and Corrective Action System

We have developed a unique execution key performance indicator (KPI) derived from the results of these advanced statistical methods and production output. This KPI moves across the continuum states of excellence from reactive-preventive-predictive-proactive based on the level of leadership focus and intensity of driving improvements.

Reliability Learnings Forever

We introduce Profit-Driven Process Reliability, based on the teachings and findings of the work of the late H. Paul Barringer. Paul would always say that the biggest opportunity for improvement is a management problem thereby leaving a lot of money on the table. We clearly understand that collectively leadership can be focused to help a business quantify baseline execution excellence and define an advancement strategy to higher levels of execution excellence and sustained profitability.

Want Your Business to Thrive or At Least Survive?

Your business must be able to adapt and change to meet the demands of an ever-changing environment. Improving business performance requires knowledge of what needs to change and the skill and commitment of the Organization to effect the changes. Success requires focused alignment, agreement, and buy-in of the leadership to drive the strategy to positively change.

In the more than 35 years I spent working for a Fortune 100 chemical company, I have seen various improvement programs, too many to enumerate, that were initiated at both corporate and local levels. These initiatives had specific areas of focus, aimed at improving Quality, Safety, Business Processes, or Manufacturing Excellence, etc., etc. Some were successful, at least for a while. Most were not. I have observed the same corporate initiative succeed at one location and fail at another. I also have seen different initiatives, with the same area of focus, have different degrees of success at the same location. These experiences have led me to conclude that the largest determinant of success or failure for a change initiative is the presence of what I will refer to as Leadership Constancy (LC).

Leadership Constancy (LC) in Practice

So to effect change, some things, particularly the message and example of Leadership, MUST be steadfast, loyal, persistent, unchanging. This concept is akin to Dr. Deming’s point #1 of 14, which is:

Create constancy of purpose toward improvement of product and service, with the aim to become competitive, to stay in business and to provide jobs.W. Edwards Deming

Below I offer several specific observations of Leadership characteristics and behaviors that will create an environment that nurtures and sustains the desired change.

Some may think that this list seems obvious, and it may be. But, as easy as it is to put these concepts on paper, there is greatly more to achieving them than meets the eye, since so many initiatives do not meet with sustained success. Experience indicates that there are many factors that enter into the leadership equation that tend to derail the improvement effort, including but not limited to:

Failure to properly assess resources required for the change effort.

The effort becomes only a part-time job for many, and mixed messages are sent (#5) regarding what is the priority at the time.

The effort buy-in is not established at all levels and functions of leadership.

Because #1 is not done beginning at the highest level, middle managers do not buy-in, and those left to implement at the lower levels of management do not have the support and commitment of their boss(es) (No chance to establish #4).

#2 is ignored or given insufficient attention, assuming the skills are in place among leadership.

Alternatively, if #2 is done sufficiently, #4 is not done sufficiently.

Detrimental Mistakes

There are two common and detrimental mistakes of Leadership regarding training:

Expect people to do things they are not trained to do.

Train people to do something and then not expect them to do it.

Reliability Learnings Forever

Due to its importance in the success of organizational improvements, Profit-Ability, LLC introduces Proactive Risk Leadership (PRL) which focuses on leadership constancy for change, a new teaching based on the findings of the work of the late H. Paul Barringer. Paul would often say, “the biggest opportunity for improvement is a management problem and thus leaving a lot of money on the table.” Clearly, what Paul meant was that collectively, leadership can now be focused to help a business quantify baseline state of execution excellence and define an advancement strategy to higher levels of excellence to achieve higher levels of sustained profitability.